As Portland officials take a hacksaw to the city’s budget, business owners will keep a close eye on the Portland Development Commission.

PDC’s proposed budget calls for the agency to spend 10 percent less on programs during the next fiscal year than it spent during 2011-12. PDC’s budget for the 2012-13 fiscal year is a proposed $162 million.

Many business owners worry that PDC may reduce grants and loan programs for small businesses. The city’s economic development agency operates several programs for small businesses, including sustainability, revitalization and storefront improvement programs.

“It’ll affect us all somehow,” said Michelle Cassinelli, owner of Village Beads in Multnomah Village and president of the Multnomah Village Business Association. “We’ve had a number of grants through the PDC. We usually have a grant every year from them. We’re not sure whether they’ll eventually give fewer or they’ll just be harder to get. Either way, there’ll be more competition for them.”

Primarily, the agency’s incoming revenue could dwindle as two urban renewal areas — within the Oregon Convention Center and Central Eastside Industrial districts — expire. Patrick Quinton, PDC’s executive director, said the agency can expect further operational reductions as early as 2014.

While the newly approved $169 million Portland State urban renewal area could erase some of those cuts, the agency, like many city departments, faces revenue losses on several fronts.

The proposed $162 million that PDC would spend this year includes:

• $23.1 million for business development services, such as jobs programs, a drop of $1.6 million from last year.

• $41.8 million for housing programs, a $13.4 million drop.

• $27.1 million for infrastructure programs, including roads and parks projects, a $7.5 million increase.

• $53.3 million for property redevelopment, a $10.4 million drop.

• $17 million for administration, about the same as last year.

The agency had spent $273 million on programs during the 2008-09 fiscal year. However, that figure includes money from federal grants that eventually moved from PDC’s purview to the city’s new Housing Bureau.

The agency spent $181 million on programs last year, about $22 million more than it had planned to spend. PDC’s expenditures are variable depending on how much money the city’s urban renewal districts generate.

PDC officials note that the agency has made several operational cuts while sharpening its economic development focus. The agency has proposed funding the equivalent of 135 full-time jobs in the next year, the same number as last year and 20 fewer than in 2010.

It is also committed to continuing such programs as the neighborhood business grant programs that have brought money to St. John’s and Hillsdale, among other areas. Plus, the popular storefront program shouldn’t be affected, said Kimberly Schneider Branam, PDC’s deputy director for strategy and operations.

“We’ll have high volumes of storefront money going out the door,” she said. “We have a lot of resources for those businesses. We’ll be doing a lot fewer speculative office buildings. When we’re doing development deals, we’ll look at whether they generate business and jobs growth.”

Portland’s City Council is expected to vote on the PDC budget later this month. The PDC board is slated to adopt the budget in June.

“The money we receive from PDC is some of the most efficient money the city spends,” said Hoell, whose group administers grants to small local businesses. “It’s critical to keep that focus and ensure a healthy economy. ”

Fast Fact

PDC’s storefront Improvement Program has provided $10 million to small businesses looking to enhance their retail spaces.